What happened to the gold price?

Jul 28, 2023

Recently the metal expert Bryan Mc Govern expressed at INN that, the US Federal Reserve has introduced a quarter percentage point hike during its July meeting. Will this be enough for the banking authority moving forward?

A soft landing strategy is beginning to look like a possibility as the US Federal Reserve delivered what economists expect to be the last interest rate hike of the cycle on July 26, with a 0.25 point raise from 5.25 percent to 5.5 percent. In an attempt to lead the economy out of a full recession, the Fed confirmed another interest rate hike, resulting in the highest point for borrowing costs in 22 years.

This marks the 11th interest rate hike performed by the Fed since March 2022. Gold and silver on the move following Fed meeting! The leading precious metals enjoyed a partial boost in value during Wednesday’s trading session. Leading up to the decision by the Fed, gold and silver saw volatility in their price charts, but they began to climb following it.

The price per ounce of gold was around US$1,965 yesterday, but it moved up to cross the US$1,972 mark multiple times during today’s trading day. Between 2:30 and 2:40 EDT, when Powell took the stage to answer questions after the decision, gold jumped from US$1,968.35 to US$1,977.31, falling shy of the US$1,980 mark but falling shy. As of 3:19 p.m. EDT, gold stood at a price per ounce of 1,973.34 — a 0.44 percent uptick for the day.

Meanwhile gold’s sibling silver saw similar volatility during Wednesday’s trading session. The metal sat at a price point of US$24.91 per ounce, representing a 0.99 percent increase in value.

In the row, experts share perspective on Fed actions & Kathy Jones, chief fixed income strategist at Charles Schwab, told CNBC she expects the Fed to follow this hike with a pause period. “But no promises. They can’t give up the option,” Jones said.

While this could be the last hike from the Fed for a while, economists quoted by the AP expect the effects of these increases to remain present for consumers into 2024. Christopher Waller, a key member of the Fed’s board, recently said he needs to see “further evidence of smaller price increases before he would be sure inflation is slowing,” per a report from Fortune.

The board member cautioned against getting burned by momentary positive results in the fight against inflation, only for the effects of these to rear their head again.

Another rate increase by the Fed is being met with more optimism than previous ones, as expectations shift towards a soft landing action and the potential to avoid the full impact of a recession. Attention now moves forward as experts anticipate whether the Fed will call it quits on the rate hikes for the foreseeable future after this latest increase or if the tactic will continue to be deployed.

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